The managing director’s contract sets out the framework for the managing director’s employment, responsibilities, and powers, and plays a crucial role for both the company’s management and the individual managing director’s legal position. A well-considered and well-balanced managing director’s contract creates clarity, predictability, and security – both in the day-to-day working relationship and in situations where the employment comes to an end.
In companies with a sole-owner structure, a managing director’s contract must be prepared, as company law requires that all agreements between the company and the managing director be made in writing.
We advise companies, owners, and managing directors on the drafting, negotiation, and interpretation of managing director contracts. Our advice takes into account that managing directors are not covered by the ordinary employment law protection rules, and that the contract therefore has particular importance in regulating rights and obligations.
We assist, among other things, with
Drafting and reviewing managing director contracts, including the determination of areas of responsibility, powers, and reporting lines
Advising on salary, bonus and incentive schemes, pension arrangements, and other remuneration
Determining terms for notice of termination, departure, and any severance compensation
Assessing and drafting non-compete, non-solicitation, and loyalty clauses
The interaction between the managing director’s contract and any shareholders’ agreements or ownership agreements
Advising in connection with a change of managing director
We have particular experience advising in situations where the managing director is also the sole owner or a co-owner. In such cases, it is essential that the contract takes into account both Danish employment law considerations and the commercial and company law framework within which the managing director operates.